However there are
restrictions in some cases in regard to investment capital, investment area,
special licenses required. The investor is suggested to consult with a law firm
in Vietnam for advice and service offering.

Before setting up
business in Vietnam, ask yourself the following questions:

1. Which business should
I invest in Vietnam?

There are
non-conditional investment areas and conditional investment areas.
Establishing company in the non-conditional investement areas are more
simple than in conditional investment areas. Investment in IT services,
manufacturing, management consulting, business promotion are a few samples of
non-conditional investment areas. Example of conditional investment areas
are real estate, trading, travel agencies, freight forwarding…which are more
complicated with investment
conditions. Investment conditions might also be changed over
the time depending on the WTO commitments which Vietnam enters.

2. What should I name
the business in Vietnam?
The company in Vietnam has to have Vietnamese name, and English name. The
company could also have abbreviated name. The name of the company in
Vietnam indicates the structure of the company, the business lines, and the
name that differentiate against other businesses. For instance, the
company could be named Alpha consulting limited liability company.

3. Where should I register
the address of the business in Vietnam?
Not every address could be used to register a company. The address has to
be an address of a house with leasing agreement or office building which owner
has license to operate as office building.

4. What is the legal
structure of the company?
Depending on the number of investor contributing capital, company could be
set-up as one member limited liability company or two ore more member limited
liability company or joint stocks company.

5. How much capital is
required to set-up a company in Vietnam?
The investment amount depends on the business plan and is subject to the
approval of the provincial Department of Planning and Investment evaluating
application dossier. In some business areas like real estate, banking and
finance, minimum capital is required. In general for non-conditional investment
area, the law does not specify the minimum capital to establish a
company in Vietnam however the State agencies that evaluate
investment plan could reject the investment project which are not feasible.
Bank statement in foreign banks could be used to prove sufficient fund of
investment capital.

6. Whom will be legal
representative and work permit in Vietnam?
The investor will need to appoint the legal representative in Vietnam to
oversee the business performance and take legal responsibility in Vietnam. If
the legal representative is an expatriate, whom is a capital contributing
member or owner of a limited liability company or a member of the Board of
Management of a shareholding company which is registered to operate in Vietnam,
he or she will be exempted from work permit in Vietnam. Otherwise, he or she
will need to have a work permit to work in Vietnam legally.
The work permit holder would then apply for temporary
residence card to live in Vietnam as long as the work permit
allows.

7. How long does it take
to set-up a company in Vietnam?
It depends on what type, scale, and whether or not conditions are required. For
a simple minimum capital without conditions to set-up, it would take 30 working
days. For setting up company in conditional investment areas i.e. trading company
in Vietnam, time would be lengthen due to the involvement of a
number of State agencies approving the investment project and it would take 60
working days. For setting up company in other investments in areas requiring
conditions to meet, time might be taken depending on the type of conditions and
the government agencies evaluating the conditions of investment.

8. Whom will be granting
the investment license in Vietnam?
For most of the investment projects, the provincial state agencies with the
approval of the Department of Planning and Investment (DPI) will be granting
the Investment Certificate in Vietnam. However, depending on the type,
scale, and whether or not conditions are required, other Vietnam State agencies might be involved. For the
case of trading company, ministry of trade and commerce, ministry of finance,
provincial people’s committee will be reviewing the investment application
dossier as well.

9. What are the tax
liability in Vietnam?
Major taxes in Vietnam are corporate income
tax, import and export tax, value added tax, and personal income tax in
Vietnam. In some special areas, there are other taxes. The corporate income tax
is currently at 22% and will reduce to 20% beginning 2016. Export is mostly
encouraged as such the export tax is 0 however there are special cases when
export tax is larger than 0. Import tax varies according to tariff. Value added
tax is mostly at 10% however in some cases, VAT could be 5% or 0%. Personal
Income tax varies according to income level and is applicable from VND
9,000,000 above.

10. What are mandatory
reports submissions requirement in Vietnam?
Companies are required to keep accounting books, prepare and submit tax reports
on monthly, quarterly and annually. Foreign companies are also required to have
financial audit taken before the financial year end. The financial year in
Vietnam is from January to December and the deadline to submit financial report
is March 30th for the previous year. Other reports
are required to be submitted at other State agencies.